Definitions

Question 1

SALES TAX

Answer 1

(1) the tax, the additional tax or default surcharge levied under this Act
(2) a fine, penalty or fee imposed or charged under this Act
(3) any other sum payable under the provisions of this act or the rules made there under

Question 2

TAXABLE SUPPLIES

Answer 2

A supply of taxable good made by an importer, manufacturer, wholesaler, distributor or retailer other than a supply of goods which is exempt and includes a supply of goods chargeable to tax at the rate of zero per cent

Question 3

SUPPLY

Answer 3

A sale or other transfer of the right to dispose of goods as owner, including such sale or transfer under a hire purchase agreement and

(1) putting to private, business or non-business use of goods produced or manufactured in the course of taxable activity for purpose other than those of making a taxable supply
(2) auction or disposal of goods to satisfy a debt owed by a person
(3) possession of taxable goods held immediately before a person ceases to be a registered person
(4) in case of a manufacturing of goods belonging to another person, the transfer or delivery of such goods to the owner or to a person nominated by him

Question 4

Manufacturer

Answer 4

Who engages exclusively or not, in the production or manufacture of goods whether or not the raw material of which the goods are produced or manufactured are owned by him and inlcude:

(1) A person who by any process or operation assembles, mixes, cuts, dilutes, bottles, packages, repackages or prepares goods by any other manner
(2) an assignee or trustee in bankruptcy, liquidator, executor or curator or any manufacturer or producer and any person who disposes of his assets in any fiduciary capacity
(3) any person, firm or company which owns, holds, claims or uses any patent, proprietary or other right to goods being manufactured whether in his or its name, or his pr its behalf, as the case may be, whether or not such person, firm or company sells, distributes, consigns pr otherwise disposes of the goods

Question 5

Manufacture/Produce

Answer 5

(1) any process in which an article singly or in combination with other articles, materials, components, is either converted into another distinct article or product or is so changed, transformed or reshaped that it becomes capable of being put to use differently or distinctly and includes any process incidental or ancillary to the completion of a manufactured product
(2) process of printing, publishing, lithography and engraving
(3) process and operations of assembling, mixing, cutting, diluting, bottling, packaging, repacking or preparation of goods in any other manner

Question 6

Retailer

Answer 6

A person supplying goods to general public for the purpose of consumption

Question 7

Retail price

Answer 7

The price fixed by the manufacturer or the importer, in case of imported goods, inclusive of all duties, charges and taxes (other than sales tax) at which any particular brand or variety of any articles should be sold to the general body of consumers or, if more than one such price is so fixed for the same brand or variety, the highest of such price

Question 8

Distributors

Answer 8

A person appointed by a manufacturer, importer or any other person for a specified area to purchase goods from him for further supply and includes a person who in addition to being a distributor is also engaged in supply of goods as a wholesaler or a retailer

Question 9

Wholesaler

Answer 9

Any person who carries on whether regularly or otherwise, the business of buying and selling goods by wholesale or of supplying or distributing goods, directly or indirectly , by wholesale for cash or deferred payment or for commission or other valuable consideration or stores such goods belonging to others as an agent for the purpose of sale and includes a person who deducts income tax at source at source under the income tax ordinance

Question 10

Registered person

Answer 10

A person who is registered or is liable to be registered under this act

Question 11

Person

Answer 11

(1) an individual
(2) a company or association of persons incorporated, formed, organised or established in pakistan or elsewhere
(3) the federal government
(4) a provincial government
(5) a local authority in Pakistan
(6) a foreign government, a political subdivision of a foreign government or public international organisation

Question 12

Taxable Activity

Answer 12

Means any economic activity carried on by a person whether or not for profit and includes

(1) an activity carried on in the form of a business,trade or manufacture
(2) an activity that involves the supply of goods, the rendering or providing of services or both to another person
(3) a one-off adventure or concern in the nature of a trade
(4) anything done or undertaken during the commencement or termination of the economic activity

Question 13

Associate

Answer 13

Two persons are associate where the relationship between the two is such that one may reasonably be expected to act in accordance with the intentions of the other, or both persons may reasonably be expected to act in accordance with intentions of a third person

Question 14

Open market price

Answer 14

Means the consideration in money which that supply or a similar supply would generally fetch in an open market

Question 15

Similar supply

Answer 15

In relation to the open market price of goods, means any other supply of goods which closely or substantially resembles the characteristics, quantity, components and materials of the aforementioned goods

Question 16

Cottage Industry

Answer 16

Cottage industry means a manufacturing concern which fulfils each of the following conditions namely:

(1) does not have an industrial gas or electricity connection
(2) is located in a residential area
(3) does not have a total labour force of more than ten workers
(4) annual turnover from all the supplies does not exceed three million rupees

Question 17

CREST

Answer 17

Computerised program for analysing and cross-matching of sales tax returns. Referred to as computerised risk-based evaluation of sales tax

Question 18

Tax period (in reference to sales tax)

Answer 18

Means a period of one month or such other period as the board with approval of the federal minister in charge may, by notification in the official gazette, specify

Question 19

Provincial sales tax

Answer 19

Tax levied under the provincial laws or laws relating to Islamabad capital territory, declared by the federal government through notification in the official gazette to be provincial sales tax for the purpose of input tax

Question 20

Output Tax

Answer 20

Means:

1) tax levied under this act on a supply of goods made by the person
2) tax levied under the federal excise act,2005 in sales tax mode as a duty of excise on the manufacture or production of the goods or the rendering or providing of the services by the person
3) provincial sales tax levied on services rendered or provided by the person
4) sales tax levied on the services rendered or provided by the person under Islamabad capital territory

Question 21

Input tax

Answer 21

Means

1. Tax levied under this act on supply of goods to the person
2. Tax levied under this act on the import of goods by the person
3. In relation to goods or services acquired by the person, tax levied under the federal excise act,2005 in sales tax mode as a duty of excise on the manufacture or production of the goods or the rendering or providing of the services
4. Provincial sales tax levied on services rendered or provided to the person
5. Levied under the sales tax act, 1990 as adapted in the state of azad jammu and Kashmir, on the supply of goods received by the person

Question 22

Assessment of Tax

Answer 22

Can be by an officer of Inland Revenue where :

1) a person who is required to file tax return, failed to file the return for a tax period by due date
2) a person pays an amount which is less than the amount of tax actually payable due to some miscalculation or error

Question 23

Return

Answer 23

A sales return is the taxpayer’s document of declaration through which taxpayer mot only furnishes the details of transactions during a tax period but also determines his sale tax liability

Question 24

Monthly Return

Answer 24

Every registered person shall furnish a true, complete and correct return in the prescribed form upto the 15th day of month next following the end of tax period. The return shall be filed in the bank or any other office specified by board

Question 25

Quarterly Return

Answer 25

The board may require any person or class of persons to submiretirn on quarterly basis

Question 26

Annual Return

Answer 26

A private or public limited company required to file annual sales tax return for a financial yesr by 30th September of the following financial year

Question 27

Revised Return

Answer 27

A registered person may file revised return to correct any omission or wrong declaration made in return filed subject to approval of the commissioner Inland Revenue having jurisdiction within 120 days of filing of return

Approval will not be needed if return is filled within 60 days of filling return and either tax payable is more than amount paid or refund claimed is less than in revised return

Question 28

Special Return

Answer 28

In addition to the return specified a registered person may be required to file special return containing info relating to:
1) Quantity of goods manufactured or produced
2) purchases made
3) goods supplied
4) payment of arrears made
The special return will be for such period as the board may be a notification in official gazette specify